PURCHASE AGREEMENT
THIS
PURCHASE AGREEMENT
(this
“Agreement”)
dated
as of April 24, 2006, is entered into among Xxxxxx Xxxxxxx Ltd., a Bermuda
company (“Company”),
and
the securityholders named on Schedule I hereto (collectively, the “Securityholders”),
with
respect to the 10.359% Senior Secured Notes Due September 15, 2011, Series
A
issued by Xxxxxx Xxxxxxx LLC (“FWLLC”)
and
guaranteed by the Company (the “Senior
Notes”)
owned
by the Securityholders.
WITNESSETH:
WHEREAS,
as
of the
date hereof, each Securityholder
beneficially owns and has the power to vote and dispose of the aggregate
principal amount of Senior Notes as set forth on Schedule I hereto (such
aggregate principal amount of Senior Notes and all accrued and unpaid interest
thereon, the “Securities”);
WHEREAS,
the
Company desires to enter into this Agreement to purchase the Securities in
exchange for the consideration described herein; and
NOW,
THEREFORE,
in
contemplation of the foregoing and in consideration of the mutual agreements,
covenants, representations and warranties contained herein and intending to
be
legally bound hereby, the parties hereto agree as follows:
1. Certain
Covenants.
1.1 Lock-Up.
Each
Securityholder hereby covenants and agrees that during the term of this
Agreement, such Securityholder will not take any action which would have the
effect of preventing or disabling such Securityholder from performing its
obligations under this Agreement. The Company hereby covenants and agrees that
during the term of this Agreement the Company and FWLLC will not take any action
that would have the effect of preventing or disabling the Company from
performing its obligations under this Agreement.
1.2 Purchase
and Sale of Securities.
Each
Securityholder agrees to sell the Securities to the Company in exchange for
25.558 common shares, par value $0.01 per share of the Company (the
“Common
Shares”)
per
$1,000 in aggregate principal amount of the Securities on the date hereof.
Subject to the terms of this Agreement, the Company hereby agrees to purchase
the Securities and to issue to the Securityholders in exchange therefor that
number of Common Shares in the ratio described above and as more particularly
set forth on Schedule I hereto. No additional Common Shares or other
consideration shall be issued or paid, as applicable, in exchange for the
accrued and unpaid interest on the Notes purchased hereunder. The Company shall
electronically deliver such Common Shares to the Securityholders promptly
following the delivery of the Securities to the Company (or to the Company’s
account with the trustee for the Senior Notes) through the DWAC program of
The
Depository Trust Company on April 25, 2006.
1.3 Public
Announcement.
The
Company shall issue a press release prior to the open of trading on the Nasdaq
Stock Market on Tuesday, April 25, 2006, and, as soon thereafter as practicable
on such date, file a Current Report on Form 8-K with a copy of such press
release attached with the Securities and Exchange Commission (the “SEC”),
which
press release shall announce the Company’s purchase of the Securities and
issuance of Common Shares hereunder and any other material, non-public
information conveyed to the Securityholders in the conversations leading up
to
this Agreement by the Company and/or its financial advisor (the “Negotiations”),
in
each case sufficient so as to enable the Securityholders to freely purchase
and
sell public securities (including the Common Shares) of the Company (such press
release and Form 8-K, collectively, the “Public
Announcements”);
provided that the Company shall (a) not be required to include any information
in such press release that would cause such announcement to constitute a tender
offer subject to Regulations 14D or 14E under the Securities Exchange Act of
1934, as amended (the “Exchange
Act”)
and
(b) afford each Securityholder a reasonable opportunity to review the Public
Announcements and will make any modifications or revisions thereto reasonably
requested by either Securityholder. Each Securityholder shall consult with
the
Company before issuing any press releases or otherwise making any public
statements with respect to the transactions contemplated herein and shall not
issue any such press release or make any such public statement without the
approval of the Company, except as may be required by law.
1.4 Disclosure.
Each
Securityholder hereby authorizes the Company to publish and disclose in any
announcement or disclosure required by the SEC or the Nasdaq Stock Market (the
“Nasdaq”)
or any
other national securities exchange, its identity and ownership of the Securities
and the nature of its commitments, arrangements and understandings under this
Agreement; provided,
however, that
the
Company shall (i) afford each Securityholder a reasonable opportunity to review
such public disclosures of its identity and ownership and (ii) make any
modifications or revisions thereto reasonably requested by such Securityholder.
The Company hereby authorizes each Securityholder to make such disclosure or
filings as may be required by the SEC or the Nasdaq or any other national
securities exchange.
2. Representations
and Warranties of Securityholders.
Each
Securityholder, severally and not jointly, hereby represents and warrants to
the
Company, as of the date hereof, and as of the date the Company issues the Common
Shares, that:
2.1 Ownership.
Such
Securityholder has good and marketable title to, and is the sole legal
beneficial owner of the Securities, in each case free and clear of all
liabilities, claims, liens, options, proxies, charges, participations and
encumbrances of any kind or character whatsoever (collectively, “Liens”).
At
the time that the Company purchases Senior Notes pursuant to this Agreement,
such Securityholder shall have transferred and conveyed to the Company or its
designee good and marketable title to the Securities, free and clear of all
Liens created by or arising through such Securityholder.
2.2 Authorization.
Such
Securityholder has all requisite power and authority to execute and deliver
this
Agreement and to consummate the transactions contemplated hereby and has
sufficient voting power and sufficient power of disposition with respect to
the
Securities with no restrictions on its voting rights or rights of disposition
pertaining thereto. Such Securityholder has duly executed and delivered this
Agreement and this Agreement is a legal, valid and binding agreement of such
Securityholder, enforceable against such Securityholder in accordance with
its
terms, subject to the qualification, however, that enforcement of the rights
and
remedies created hereby is subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general application
related to or affecting creditors’ rights and to general equity principles.
-2-
2.3 No
Violation.
Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (a) require such Securityholder to
file or register with, or obtain any material permit, authorization, consent
or
approval of, any governmental agency, authority, administrative or regulatory
body, court or other tribunal, foreign or domestic, or any other entity, or
(b) violate, or cause a breach of or default under, any material contract
or agreement, any statute or law, or any judgment, decree, order, regulation
or
rule of any governmental agency, authority, administrative or regulatory body,
court or other tribunal, foreign or domestic, or any other entity or any
arbitration award binding upon such Securityholder, except for such violations,
breaches or defaults which are not reasonably likely to have a material adverse
effect on such Securityholder's ability to satisfy its obligations under this
Agreement. No proceedings are pending which, if adversely determined, will
have
a material adverse effect on any ability to vote or dispose of any of the
Securities. Such Securityholder has not previously assigned or sold any of
the
Securities to any third party.
2.4 Each
Securityholder Has Adequate Information.
Such
Securityholder is (i) a “qualified institutional buyer” as such term is defined
in Rule 144A under the Securities Act of 1933, as amended (the “Securities
Act”)
or
(ii) an “accredited investor” as such term is defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act, and in each case, such Securityholder
is
knowledgeable, sophisticated and experienced in making, and is qualified to
make, decisions with respect to investments in, and dispositions of, securities
representing an investment decision like that involved in the exchange of
Securities for Common Shares under this Agreement. Such Securityholder is making
its investment decision on the basis of information regarding the Company that
is publicly available (including reports filed with the SEC) or was disclosed
in
the Negotiations. Such Securityholder acknowledges that the Company may be
in
possession of other material non-public information and is making its investment
decision at its own risk. Such Securityholder acknowledges that the Company
has
not made and does not make any representation or warranty, whether express
or
implied, of any kind or character except as expressly set forth in this
Agreement.
2.5 No
Setoff.
No
Securityholder has any liability or obligation related to or in connection
with
the Securities other than the obligations to the Company as set forth in this
Agreement.
3. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to each Securityholder, as of the date
hereof, and as of the date the Company issues the Common Shares,
that:
3.1 Authorization.
The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
transactions contemplated hereby have been duly authorized by the Company’s
Board of Directors, the Company has duly executed and delivered this Agreement
and this Agreement is a legal, valid and binding agreement of the Company,
enforceable against it in accordance with its terms, subject to the
qualification, however, that enforcement of the rights and remedies created
hereby is subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general application related
to or
affecting creditors’ rights and to general equity principles.
-3-
3.2 No
Violation.
Neither
the execution and delivery of this Agreement by the Company nor the consummation
by the Company of the transactions contemplated hereby will (i) violate any
provision of the Company’s or FWLLC’s memorandum of association or bye-laws or
other organizational documents or those of any of its material subsidiaries;
or
(ii) violate, or cause a breach of or default under, any material contract
or
agreement, any statute or law, or any judgment, decree, order, regulation or
rule of any governmental agency, authority, administrative or regulatory body,
court or other tribunal, foreign or domestic, or any other entity or any
arbitration award binding upon the Company or FWLLC, except for such violations,
breaches or defaults which are not reasonably likely to have a Material Adverse
Effect. A “Material
Adverse Effect”
shall
mean any change, event, occurrence, effect or state of facts that, individually,
or aggregated with other such matters, is materially adverse to, or otherwise
could reasonably be expected to materially adversely affect, the business,
assets (including intangible assets), properties, financial condition or results
of operations of the Company and its subsidiaries taken as a whole or the
ability of the Company to perform its obligations under this
Agreement.
3.3 Company
SEC Documents. Since
December 31, 2005, the Company and its subsidiaries, as applicable, have filed
all Company SEC Documents. “Company
SEC Documents”
means
all forms, reports, schedules, statements and other documents required to be
filed by each of the Company and its subsidiaries, as applicable, with the
SEC
under the Exchange Act or the Securities Act. The consolidated financial
statements of the Company included in the Company SEC Documents at the time
filed (and, in the case of registration statements, on the dates of
effectiveness and the dates of mailing, respectively) were prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (except as may be indicated
in
the notes thereto or, in the case of unaudited statements, as permitted by
Form
10-Q of the SEC), and fairly present in all material respects (subject, in
the
case of unaudited statements, to normal, recurring audit adjustments) the
consolidated financial position of the Company and its subsidiaries as at the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended.
3.4 No
Material Adverse Effect.
There
has not occurred or become known to the Company any event, development or
circumstance since December 31, 2005 that (i) has caused or could
reasonably be expected to cause a Material Adverse Effect, or (ii) has or could
reasonably be expected to have a material adverse effect on the Company’s
ability to consummate the transactions contemplated hereby that, in the case
of
clause (i) only, has not been disclosed in the Company SEC Documents or
disclosed in writing to the Securityholders prior to the date
hereof.
-4-
3.5 No
Governmental Filings, etc.
The
execution, delivery and performance by the Company of this Agreement and the
transactions contemplated hereby do not and shall not require any registration
or filing with, the consent or approval of, notice to, or any other action
with
respect to, any Federal, state or other governmental authority or regulatory
body.
3.6 Issuance
under Section 3(a)(9).
The
issuance of the Common Shares in exchange for the Securities hereunder will
be
exempt from registration under the Securities Act pursuant to Section 3(a)(9)
thereof. No commissions or other remuneration has been or will be paid directly
or indirectly for soliciting the exchange pursuant to this Agreement.
Accordingly, the Common Shares issued to the Securityholders hereunder will
be
free of any restrictive legend or stop transfer order and, assuming that the
Securityholders are not affiliates of the Company within the meaning of Rule
405
under the Securities Act, will be freely transferable by the
Securityholders.
3.7 Issuance
of Common Shares.
Upon
issuance pursuant to this Agreement, the Common Shares issued to the
Securityholders shall be duly authorized, validly issued, fully paid and
nonassessable shares of capital stock of the Company.
4. Survival
of Representations and Warranties.
The
respective representations and warranties of each Securityholder and the Company
contained herein shall not be deemed waived or otherwise affected by any
investigation made by the other party hereto, and each representation and
warranty contained herein shall survive the closing of the transactions
contemplated hereby and the Termination Date (as defined below) until the
expiration of the applicable statute of limitations, including extensions
thereof.
5. Specific
Performance.
Each
Securityholder and the Company acknowledge that the other such party or parties
will be irreparably harmed and that there will be no adequate remedy at law
for
a violation of any of the covenants or agreements which are contained in this
Agreement. It is accordingly agreed that, in addition to any other remedies
which may be available to the parties hereunder upon the breach by any of the
other parties of such covenants and agreements, the non-breaching party or
parties shall have the right to obtain injunctive relief to restrain any breach
or threatened breach of such covenants or agreements or otherwise to obtain
specific performance of any of such covenants or agreements.
6. Miscellaneous.
6.1 Term.
(a)
This Agreement shall terminate upon the consummation of the transactions
contemplated hereby (the “Termination
Date”).
(b)
At
the Termination Date, this Agreement shall thereupon become void and be of
no
further force and effect, provided that nothing herein shall relieve any party
from liability hereof for breaches of this Agreement prior to the Termination
Date.
6.2 Expenses.
Each of
the parties hereto shall pay its own expenses incurred in connection with this
Agreement. Each of the parties hereto warrants and covenants to the others
that
it will bear all claims for brokerage fees attributable to action taken by
it.
-5-
6.3 Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective representatives and permitted
successors and assigns.
6.4 Entire
Agreement.
This
Agreement contains the entire understanding of the parties and supersedes all
prior agreements and understandings between the parties with respect to its
subject matter, other than prior agreements and understandings set forth in
any
confidentiality agreements entered into between the Company and any
Securityholder. This Agreement may be amended only by a written instrument
duly
executed by the parties hereto.
6.5 Headings.
The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Time
is
of the essence with respect to all provisions of this Agreement.
6.6 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be an
original, but each of which together shall constitute one and the same
Agreement. Delivery of an executed counterpart of a signature page by facsimile
shall be effective as delivery of a manually executed counterpart.
6.7 Notices.
All
notices, requests, claims, demands and other communications hereunder shall
be
in writing and shall be given (and shall be deemed to have been duly given
if so
given) by delivery, telegram or telecopy, or by mail (registered or certified
mail, postage prepaid, return receipt requested) or by any national courier
service, provided that any notice delivered as herein provided shall also be
delivered by telecopy at the time of such delivery. All communications hereunder
shall be delivered to the respective parties at the following addresses (or
at
such other address for a party as shall be specified by like notice, provided
that notices of a change of address shall be effective only upon receipt
thereof):
| (a) |
If
to the Company:
Xxxxxx
Xxxxxxx Ltd.
c/o
Xxxxxx Xxxxxxx Inc.
Xxxxxxxxxx
Xxxxxxxxx Xxxx
Xxxxxxx,
Xxx Xxxxxx 00000-0000
Attn:
Xxxxx Xxxx
Telecopy:
(000) 000-0000
|
| with a copy to: |
King
& Spalding LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxxx X. Xxxxxx, Esq.
Telecopy:
(000) 000-0000
|
| (b) | If to a Securityholder, to such Securityholder’s address set forth on Schedule I |
-6-
6.8 Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without regard to its principles of conflicts
of
laws that would result in the application of the laws of any other
jurisdiction.
6.9 Enforceability.
The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
6.10 Remedies
Not Exclusive.
All
rights, powers and remedies provided under this Agreement or otherwise available
in respect hereof at law or in equity will be cumulative and not alternative,
and the exercise of any thereof by either party will not preclude the
simultaneous or later exercise of any other such right, power or remedy by
such
party.
6.11 Waiver
of Jury Trial.
EACH
PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
-7-
IN
WITNESS WHEREOF,
the
Company and each Securityholder have caused this Agreement to be duly executed
as of the day and year first above written.
XXXXXX
XXXXXXX LTD.
By:
/s/ Xxxxxxx X. Xxxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxxx
Title:
Chairman, President & CEO
XXXXXXX
XXXXX GLOBAL ALLOCATION FUND, INC.
By:
/s/
Xxxx Xxx X’Xxxxxxx
Name:
Xxxx Xxx X’Xxxxxxx
Title:
Director MLIM, Authorized Signatory
XXXXXXX
XXXXX INTERNATIONAL INVESTMENT FUND (MLIIF Global Allocation
Fund)
By:
/s/
Xxxx Xxx X’Xxxxxxx
Name:
Xxxx Xxx X’Xxxxxxx
Title:
Director MLIM, Authorized Signatory
FAM
VARIABLE SERIES FUNDS, INC. (Mercury Global Allocation V.I.
Fund)
By:
/s/
Xxxx Xxx X’Xxxxxxx
Name:
Xxxx Xxx X’Xxxxxxx
Title:
Director MLIM, Authorized Signatory
FAM
SERIES FUND, INC. (Mercury Allocation Strategy Portfolio)
By:
/s/
Xxxx Xxx X’Xxxxxxx
Name:
Xxxx Xxx X’Xxxxxxx
Title:
Director MLIM, Authorized Signatory
S-1
[Signature
Page Continued]
ORE
HILL HUB FUND LTD.
By:
Ore
Hill Partners LLC
Its:
Investment Advisor
By:
/s/
Xxxxxx X. Xxxx
Name:
Xxxxxx X. Xxxx
Title:
General Counsel, One Hill Partners LLC
S-2
Schedule
I
|
Securityholder
|
Senior
Notes
|
Common
Shares
|
Address
|
|||||||
|
Xxxxxxx
Xxxxx Global Allocation Fund, Inc.
|
$
|
32,382,000
|
827,619
|
000
Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx,
XX 00000
Attention:
Xxxx X’Xxxxxxx
|
||||||
|
Xxxxxxx
Xxxxx International Investment Fund (MLIIF Global Allocation
Fund)
|
$
|
7,630,000
|
195,008
|
000
Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx,
XX 00000
Attention:
Xxxx X’Xxxxxxx
|
||||||
|
FAM
Variable Series Funds, Inc. (Mercury Global Allocation V.I.
Fund)
|
$
|
1,875,000
|
47,921
|
000
Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx,
XX 00000
Attention:
Xxxx X’Xxxxxxx
|
||||||
|
FAM
Series Fund, Inc. (Mercury Global Allocation Strategy
Portfolio)
|
$
|
685,000
|
17,507
|
000
Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx,
XX 00000
Attention:
Xxxx X’Xxxxxxx
|
||||||
|
Ore
Hill Hub Fund Ltd.
|
$
|
7,428,000
|
189,845
|
Ore
Hill Partners LLC
000
Xxxxx Xxxxxx
0xx
Xxxxx
Xxx
Xxxx, XX 00000
Attn:
Xxxxxxxx Xxxxx
|
||||||
